$112.225M financing secured for 483-unit unsubsidized low-income apartment development in San Diego

SAN FRANCISCO, Dec. 18, 2024 – JLL Capital Markets and Impact Housing announced today that they have arranged $112.225 million in financing for Mission Gorge, a modular, affordable housing multifamily development in San Diego, California.

JLL worked on behalf of the borrower, Impact Housing and Verbena Road Holdings, to secure an $85.225 million, three-year, floating rate senior construction loan through ACORE CAPITAL. JLL also arranged the $27 million in preferred equity with Ascendant Capital Partners.

At a time when polls show that the cost of living is a top issue for Americans, the Mission Gorge project offers a model for how to efficiently build quality housing that is affordable to working families and low-income individuals. Located in one of the nation’s priciest housing markets, the project features naturally affordable rents without taxpayer funded subsidy. The development furthers Impact Housing’s unique reputation for building high-quality apartments for San Diego’s workforce without need for public subsidy.               

Situated at 6171 Mission Gorge Rd., is strategically positioned in the eastern sector of San Diego's Mission Valley submarket. Just 15 minutes north of Downtown San Diego and near the I-8 and the Grantville trolley station, this community offers convenient access to the city's largest job centers and most attractive destinations. Residents will appreciate the proximity to San Diego State University, several of the city's leading hospitals and walking distance access to high-quality retail centers and restaurants.

“The housing industry is not currently capable of producing enough homes to meet demand.  Impact Housing offers a new solution to address the supply imbalance by using our vertically integrated, modular-based platform. Our unique approach delivers high quality, yet highly affordable, housing at a scale capable of addressing America’s housing crisis,” said Drew Orenstein, CEO of Impact Housing. “This is more than construction, it’s a commitment to a world where everyone can feel good about the cost and the quality of where they live, no matter their income. The City of San Diego has been an ideal partner in advancing this goal. We plan to do more in San Diego, while seeking other partners in cities that share in our vision.”

Mission Gorge, which will offer rents approximately 20% below comparable market rents, demonstrates an unsubsidized, private capital solution to providing low- and moderate-income households a place they can be proud to call home. The efficiency of Impact Housing’s modular approach is shown through the site being fully entitled at close, with 100% of the modules already constructed.

The community will feature a mix of studios and one-bedroom units that will all be affordable to San Diego’s workforce and specifically to those qualifying as low-income, earning at or below 80% of the area median income.  The homes are equipped with quartz countertops, appliances, wall dividers with built-in storage, and recessed lighting with dimmer switches. Community amenities include lounge space, a 4,150-square-foot roof deck, a fully equipped fitness center, coworking space, ground floor retail and washer and dryer facilities.

JLL Capital Market’s Debt Advisory team representing the borrower was led by Executive Managing Director Charles Halladay, Associate Joseph Choi and Analyst Will Bond.

"Mission Gorge represents an innovative solution to address San Diego's housing needs," said Halladay. "The combination of Impact Housing's efficient modular construction process and the project's naturally affordable rents make this a compelling investment opportunity in a high-demand submarket."

Scott Swisher, Managing Director, Head of Western Region Originations at ACORE CAPITAL, stated, “ACORE is excited to be affiliated with this project. It offers an ideal mix of density across highly efficient studio and one-bedroom units, in a fantastic location at an attainable price point for tenants. We appreciate the opportunity to be involved with high-quality projects like Mission Gorge and hope to have the opportunity to work with Impact Housing on future projects.”

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.

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Jones Lang LaSalle Americas, Inc. ("JLL") is a real estate broker licensed with the California Department of Real Estate, license #01223413.

Impact Housing is a pioneering Southern California-based company dedicated to addressing the region's housing crisis through innovative and socially responsible multifamily developments. The company uniquely targets the underserved segment of low- and moderate-income households by delivering unsubsidized housing at affordable rent levels. Impact Housing's groundbreaking approach integrates the roles of developer, design-builder and property manager under one roof, enabling the delivery of cost-effective housing solutions in locations previously deemed unfeasible.

Verbena Road Holdings, Ltd., led by President and Chief Investment Officer Dennis J. Wong, manages and oversees the Wong family's investments, including a minority ownership interest in Impact Housing. With over 30 years of experience in real estate and 20 years in private equity investing, Wong co-founded SPI Holdings, LLC in 1995, which continues to own and manage over $1.5 billion in real estate investments.

ACORE CAPITAL, LP, is one of the largest Investment Managers of U.S. commercial real estate debt, managing capital for investors located in the U.S., Canada, Europe, Middle East and Asia. Through offices in New York, Miami, Los Angeles, San Francisco and Dallas, ACORE CAPITAL originates, acquires and manages first mortgages, B-notes, mezzanine debt and preferred equity, providing comprehensive financing solutions across the risk and return spectrum.  For more information, please visit www.ACORECAPITAL.com.

Ascendant Capital Partners is a vertically integrated real estate investment, development and operating platform headquartered in Los Angeles with additional offices in Dallas and regional teams nationwide. The company focuses on hospitality, residential sectors and selected opportunistic special situations through its commingled institutional funds. Since its founding in 2019, Ascendant's Managing Partnership has leveraged their collective experience of acquiring and developing over $20 billion in real estate assets to deploy more than $1 billion of equity.